- Gotbit allegedly manipulated $WATER token prices, selling more tokens than they purchased, raising fraud concerns.
- WaterCoin devs transferred 844.44M $WATER to new wallets, selling them for $2.35M in $SOL, fueling manipulation accusations.
- The FBI created a fake token to catch Gotbit, ZM Quant, and CLS Global in a $25M crypto market manipulation probe.
The U.S. SEC, FBI, and DOJ have taken legal action against Gotbit and several other cryptocurrency firms, accusing them of fraud and market manipulation. Gotbit, known as a prominent “market maker,” allegedly manipulated token prices, including $WATER, under the guise of adjusting prices fairly.
However, their actions revealed that they sold a significantly higher number of tokens than they purchased, casting doubt on their intentions. Recent reports unveiled that the WaterCoin development team moved 844.44M $WATER to new wallets that were not part of the initial pre-sale. These wallets then proceeded to sell the tokens for a total of over $2.35 million in Solana ($SOL).
Gotbit and Co. Face Serious Allegations
An extensive investigation into fraud has led federal authorities to accuse fifteen individuals and three cryptocurrency companies. In a groundbreaking move, the FBI oversaw the development of a new token to combat criminal activities in the crypto market.
The implicated firms, including Gotbit, ZM Quant, and CLS Global, are alleged to have inflated token volumes to deceive investors. As a result, over $25 million worth of cryptocurrency has been seized. Some defendants have been arrested, while others have agreed to plead guilty.
Gotbit’s CEO, Aleksei Andriunin, was apprehended in Portugal, along with two other employees charged with “wash trading” since 2018. Wash trading, a manipulation tactic involving self-trading to artificially boost token volume, has been a longstanding issue in the industry.
Additionally, other companies like ZM Quant and CLS Global were caught manipulating a token created by the FBI. Their scheme involved artificially inflating volume to pump the token’s value before offloading it, leading to losses for retail investors.
Further Arrests and Legal Actions
The investigation has expanded to other tokens, such as Saitama and Robo Inu, which have ties to Gotbit. In addition to Gotbit, firms like Lillian Finance and VZZN are facing fraud charges. The founders of these companies, as well as individuals associated with Pham, have been accused of market manipulation.
Civil lawsuits initiated by the U.S. SEC seek permanent injunctions and financial penalties against the accused parties. This crackdown sheds light on the pervasive manipulation within the cryptocurrency space, demonstrating authorities’ commitment to holding perpetrators accountable for defrauding investors.